Ariz. Premier Closes Down, Owes Subs

The Premier Pools name is no longer in Arizona, following financial problems that ultimately led to the location’s license being revoked.

Premier Pools Management Corp., based in Rancho Cordova, Calif., licenses use of the Premier Pools brand to 62 offices in more than 20 states as well as India, and most recently, Mexico. The company reported $120 million in revenue in 2013, an increase of 36 percent over 2012.

In 2010, PPMC sold its corporate-owned locations so the company could focus on its licensing operation. Retailer Rob Carter purchased two of them — one in Tucson and one in the Phoenix metro area.

Before that, Carter had more than 20 years’ experience in retail management, according to a PPMC press release written at the time. PPMC also named Carter president of its retail division, in charge of retail operations throughout the country.

In early 2013, Carter closed the Tucson location and began working out of Phoenix, citing high overhead costs and a rough economy for retail, said Paul Porter, PPMC’s CEO. A couple of months later, it became apparent the problem was larger, Porter added.

“I started getting rumblings from some subcontractors that they weren’t getting paid,” he said. “I gave [Carter] a 60-day window to clean his mess up.”

Additionally, reports began surfacing about homeowners who were waiting a long time for their pools to be completed.

When Porter continued to hear of problems, he took away Carter’s Premier licensing rights, he said.

Arizona’s registrar of contractors has revoked the company’s contractor license as well. At press time, the company had 11 complaints that were substantiated and are under investigation, with another 37 being explored to see if they, too, warrant investigation, said Durina Farrall, a legal secretary for the agency.

Currently, PPMC is completing all of the projects that had been started and continues to take warranty calls from Arizona customers, Porter said.

“We’re not abandoning the market or the customers,” he explained. “As soon as we find a suitable licensee, we’re going to be back. There’s no question about it.” The next Arizona licensee likely will be paid by PPMC to handle warranty work on existing Premier Pools, he added.

While Porter paid subcontractors for completing the outstanding pools, he said he can’t pay for work done before he took over the projects. The licensee offices are independently owned and operated, and PPMC doesn’t have access to their books or contracts with the subs, Porter said.

“I feel bad for them,” he said. “But we don’t negotiate with the subcontractors; we don’t pay the [licensee’s] bills with the subcontractors.”

For several subs, that reality has been dire. Some reported losses in the tens of thousands, and a few local professionals said they knew of companies that were out more than $100,000. Total combined losses sustained by subcontractors may be approaching the half-million-dollar mark, with one firm possibly forced out of business, according to a number of sources who spoke off the record.

These subs reported that the payments began to come more slowly about 18 months ago. Then the checks started to bounce. This created a classic trap where the companies continued taking on new work for Premier in the hopes of increasing their chances of getting paid for outstanding jobs.

“The subs carried them for years, and all we were trying to do was get paid down,” one industry member said. “You don’t want to write off the [loss]; you want to try to get paid for it. If I stop doing the work, I’m not going to get the money. … Last year we finally said ‘no more.’

“How that owner can just walk away from owing hundreds of thousands of dollars and not be accountable is a crime.”

Some said they’d like to see protections put in place, such as more substantial bond requirements, to ensure that money is available if a company abruptly closes.

At press time, the phone number for Premier Pools in Arizona was disconnected.